Will Silver Short Sellers Get Body Slammed?

London (July 23)  The daily trend lines in the iShares Silver Trust (SLV) are currently bearish, and don’t let anyone convince you otherwise. Since mid-2016, silver has been stuck in a downtrend that occurred in two symmetrical channels. It is understandable that pure technicians have a bearish view for silver; the daily trend lines look awful.

As silver begins to approach a key downtrend line, it will be crucial for SLV to overcome both the downtrend line and horizontal support near $16/share. If silver can get two consecutive weekly closes above $16/share, then perhaps even the technical short-sellers will have to reevaluate their views. If silver leaps ahead in the coming weeks, it could even be helped along by hedge fund and other short covering.

Ideally for silver bulls, short sellers will get body slammed in the coming weeks.

We hold a favorable view for silver and SLV for the week ahead; however, if gold pulls back to test key levels, silver could fall with it. Here is our precious metal matrix for gold and silver. We update this matrix in our daily report for our Seeking Alpha premium subscribers.

Source: VikingAnalytics